For the last two or three years banks have been reluctant to formally appoint Receivers over bad loans.  Since the summer however we have seen a marked upwards trend in appointments, especially in Fixed Charge Receiverships, a relatively new phenomenon in Ireland but very similar to LPA Receivers in the UK.  Essentially these are "stripped down" Receiverships where the lender appoints an estate agent directly to sell a property as a Fixed Charge Receiver, rather than appointing an Accountant or other insolvency specialist.  The idea is to reduce the costs associated with the appointment, to maximise the possible return for the lender.

We expect to see more appointments over the coming weeks and the courts could be busy with some challenges.  Receivers are always appointed on the basis of a document, typically a mortgage deed, where a contract (usually a loan agreement, but sometimes even an overdraft agreement or other facility) has been broken.  The powers of the Receiver will be governed by the document, and supplemented by the 2009 Land and Conveyancing Reform Act.

Typically appointments are being made by Banks or NAMA using a simple deed of Appointment, which allows the Receiver to step in a take over the property (and, in many cases to manage the assets and collect rents etc).  Whilst the Receiver will then bring the property to sale and find a buyer, agree a price etc, the actual deed of transfer will be executed by the Bank in the end.  This helps to preserve clean title, so that buying from a Receiver should not cause a purchaser any title problems.  The main downside however is that the Receiver will not know a lot about the property and will be selling on a "sold as seen" basis.  It is very important to make sure planning, building regulations and access issues are very well cleared up before you buy, as getting them tidied up afterwards can be expensive and time consuming.

At Leman Solicitors we have expertise in acting for Receivers, Banks and borrowers in distressed property situations.